Random House US adopts agency pricing

The US division of publishers Random House has now adopted the agency pricing model which sees publishers set the retail price of ebooks and pay a commission to the retailer.

The firm was the only large publisher not to adopt the model and the move could see its books listed in Apple’s US iBookstore which only stocks titles priced under the model.

In a statement Random House said agency pricing “guarantees a higher margin for retailers than did our previous sales terms.”

“We are making this change both as an investment in the successful digital transition of our existing partners and in order to give us the opportunity to forge new retail relationships.”

Random House UK told The Bookseller “new commercial models in the fast changing e-book environment are constantly under review” but indicated it would not be moving agency pricing at this time.

In the UK the pricing model is currently under investigation by the Office of Fair Trading following complaints.

Some publishers adopted agency pricing in order to sell books through Apple’s iBooks app and then extended the model to other retailers including Amazon’s Kindle store.

In October Amazon’s UK Kindle team published a blog post in which they claimed moving to the agency model would “raise prices on e-books for consumers almost across the board” although they subsequently moved to agency terms for ebooks published by Hachette, HarperCollins and Penguin.

The OFT has stressed that the investigation is at an early stage and that it does not imply any publisher or retailer has broken UK or EU competition law.

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